Corporate Counsel Weigh In On Privilege Issue

A legal malpractice case being closely watched by corporate lawyers has involved a further development with the an issues that is dividing corporate counsel from Big Law attorneys.

A group of 74 law firms argued that a firm’s internal communications about responsibilities and duties to clients are actually privileged from those clients. The Association of Corporate Counsel (ACC) however disagrees and has filed last week saying withholding communications like that would harm its members.

The Washington-based Association of Corporate Counsel rerpresents more than 35,000 attorneys in 85 countries and the case will have far-reaching consequences for its members.

As Natasha Lindstrom at TribLive reported, the ACC’s main concern is enabling attorneys for nonprofits to act as whistleblowers “would violate the fundamental duty of loyalty owed by counsel, thereby eroding the attorney-client relationship that is integral to the administration of justice in our society,” according to a brief filed Wednesday.

The group, which is not a party in the case, urged the high court to uphold a lower court ruling rejecting the notion that nonprofit attorneys should get an exception from legal confidentiality rules.

The party appealing the case to the Supreme Court counters that nonprofit attorneys should be allowed to leak information to the state Attorney General’s Office when they believe a charity has broken the law, based on the premise that charitable funds are held in trust on the public’s behalf.

“The AG is not and should not be permitted to go behind the back of organizations — whether for-profit or nonprofit — and obtain information from counsel in breach of the strict duty of confidentiality imposed by the professional ethics rules,” the Association of Cor­porate Counsel wrote in its amicus brief , a way for outside parties to provide input on cases of wider interest.

To be clear, the group “does not defend bad actors” misspending charitable funds, said Amar Sarwal, the association’s vice president and chief legal strategist.

“We’re trying to defend attorney-client relationships,” he said. “Whatever rule the court articulates, it applies to good actors, too.”